Half-year results from RIT Capital Partners (RCP) and Rights and Issues (RIII) and updates from other investment companies including Gore Street Energy Storage, VH Global Energy Infrastructure, Foresight Solar and Syncona.

Private equity props up RIT’s half year

RIT Capital Partners (RCP) battled against the weak dollar to deliver a 3.4% investment return in the six months to 31 May. The increase in net asset value would have been nearly double that were it not for the 10% fall in the dollar in which over half the investment trust’s assets are priced. The underlying return was just ahead of its 3.3% inflation benchmark, but below the 3.9% gain in the MSCI All Countries World index. The global multi-asset fund was pleased that all three “pillars” of the portfolio generated positive returns, particularly private investments which have caused concern for some shareholders and analysts. These returned 9%, the strongest performance in four years, with a 29% return from direct stakes in companies. A total of £175m of realisations, such as the partial exit from Scale AI, sale of Xapo and the flotation of Webull, reduced the fund’s allocation to off-market assets to 30.9% from 33.4% in line with the company’s target. Quoted equities and uncorrelated strategies returned 2.4% and 3% respectively. Nevertheless, the share price performance was weak, slippping 1% in the period as the discount to NAV widened to 27.4% despite the company buying back a further £52m of shares. Since the start of 2023, RCP has repurchased 10%, or nearly £300m of its shares in total. The half-year follows 2024 annual results we described as “solid”.

QuotedData’s James Carthew said: “The weak dollar has been a major headwind for global portfolios. It is good to see that RIT Capital Partners has managed to make way regardless and particularly pleasing that the main driver for this was the private investments pillar, exposure to which has often been cited as a justification (unwarranted in our view) for the wide discount. If asked, the managers would reinforce the message that this is a long-term investment, but it must still be nice to see it sitting on six-month NAV returns that are ahead of all but two global equity trusts (Manchester & London and AVI Global).”

Stifel analyst Iain Scouller retained his “positive” rating: “At 1948p, the shares are on a 27% discount to the June NAV, which we think offers value given the greater clarity around strategy and improved portfolio transparency. Even if we apply a c.30% discount on the 31% of the portfolio in private investments (similar to the discounts on listed private equity funds), the shares are still on a c.18% discount. Assuming we continue to see solid investment returns as during H1, we see scope for the overall discount on RIT to narrow in to the low teens from 27% currently.”

Buyback bar hurts Rights and Issues

Rights and Issues (RIII), the £105m UK smaller companies trust run by Matt Cable and Tim Service at Jupiter Asset Management, underperformed in the first six months of the year with a 2.9% capital return and 4.3% total return. These lagged both the FTSE All-Share, which returned 6.8% in capital and a 9.1% total return, and the 7% gain in the Deutsche Numis Smaller Companies index, the company said in half-year results. However, shareholders suffered a 6.7% loss after the company’s ability to buy back shares was blocked at the annual general meeting by a single shareholder, believed to be Nicholas Lewis of Dartmoor Investment Trust. The share price discount has since widened to 16%. The managers said they were focused on growing NAV and were positive about prospects: “In any kind of UK recovery, we think that equity valuations look compelling and will continue to attract investor interest, even if that comes in the form of takeover approaches as has been the case recently. We remain optimistic that public market investors will start to recognise the opportunity as well, leading to a broader re-rating of what remains a very unloved and under-owned asset class.”

ENRG publishes windup circular

VH Global Energy Infrastructure (ENRG) has published a circular detailing the proposal to wind-down the renewables portfolio announced in May, with manager Victory Hill selling its assets and returning money to shareholders. A general meeting will be held at 10am on 28 August at the offices of Victory Hill Capital Partners in London. Net asset value fell 2.3% in the three months to 30 June with NAV per share declining to 100.9p from 103.29p at 31 March.

Proxy advisers back GSF

Gore Street Energy Storage (GSF) says proxy advisers PIRC and Institutional Shareholder Services (ISS) have backed the battery fund’s board and recommended shareholders vote against resolutions brought by RM Funds to appoint two new directors at a meeting on 20 August with a view to re-setting the company’s strategy and seeking a merger following shareholder losses over five years. The company says it has set out its strategy for restoring shareholder value with a plan to sell its construction projects and reinvest in its operational assets.

SYNC to say more about wind-up

Syncona (SYNC), the £595m life sciences fund that announced plans to wind down in June on account of its chronically wide share price discount, says it will update shareholders next month on its proposal to offer a private fund in which institutional shareholders could transfer to. Fund manager Chris Hollowood says each of its 10 holdings has “key value inflection points” over the next three years that could drive significant growth, though he added these were not without risk. Net asset value per share of the £1.04bn portfolio rose 0.5% to 171.8p at 30 June from 170.9p at 31 March.

FSFL falls 2.5%

Foresight Solar (FSFL) says net asset value fell 2.5% in the three months to 30 June, standing at £603.8m down from £620.9m at 31 March. NAV per share declined to 108.5p from 111p putting the £480m 9.4%-yielder on a 21% discount with the shares at 85.75p. The main factor was a further decline in power price forecasts that has affected all renewables funds, although FSFL did see above-budget generation in the sunny weather.

Big uplift for CGEO

Georgia Capital (CGEO), the £818m single country emerging markets fund, saw net asset value per share advance 17.7% in the second quarter, driven by operating growth of its private large portfolio companies and the continued growth in Lion Finance Group’s share price.

Other news

Sirius Real Estate (SRE) has bought two more business parks, spending €23.4m on one in Dresden, Germany, and £16.1m on a second in Bedford, UK.

Great Portland Estates (GPE) has completed the refurbishment of its office at 141 Wardour Street, west London with around two thirds of space let or under offer. Additionally, the building’s 5,200 sq ft retail unit, which was pre-let to fashiion retailer REPRESENT in April, has opened.

Octopus AIM VCT 2 (OSEC), a £80.7m portfolio of mostly AIM-listed stocks, has reported a “disappointing” 2% drop in net asset value for the half-year to 31 May after accounting for the final 1.8p dividend. This underperformed the AIM index which rose 2.8%.